DJ Comex Copper Review: Contract High
by: clint44eastwood
Long-Term Sentiment: Strong Buy 07/27/05 03:22 pm
Msg: 26447 of 26448
DJ Comex Copper Review: Contract High
On Spec Buying, Data
DOW JONES NEWSWIRES
September copper futures moved to a fresh contract high
in New York on Wednesday,
lifted by speculative buying.
The market was buoyed by U.S. economic
data that had favorable implications
for copper demand,
as well as more
inventory drawdowns.
The most-active September copper contract settled up
2.10 cents at $1.6270 per pound on the Comex
division of the New York Mercantile Exchange.
December copper rose 2.15 cents to $1.5555.
"There was some fund and commission-house buying
early in the day," said Tom
Boustead, metals analyst with Refco.
As a result, the September futures hit a
contract high of $1.6220 early in the session,
which was extended to $1.6350 in
the final hour of trading.
Light buy stops were elected on the Comex
as the futures ticked up through
the areas around $1.6200 and $1.6250,
said a trader.
"There was a lot of speculative buying,"
he said.
"The copper situation is
making everyone nervous."
Inventories at London Metal Exchange and
Comex warehouses remain low and
backwardation -
when deferred copper is more expensive
than the nearby -
is continuing.
Both are seen as signs of tightness.
Against this backdrop, a
strike against Asarco is approaching four
weeks with no more negotiations
planned until next week.
The London market has been pulling
the Comex futures higher, a trader
reported.
Three-months copper in London hit a fresh record high
of $3,497.50 a metric ton on short covering
just before the late kerb.
The trader referred to
copper as the "flagship" pulling up
other base metals with it.
Many traders are reluctant to short any
of them, he adds.
After builds in LME warehouse stocks of copper
the last two days, the
long-running decline
resumed Wednesday.
They fell 300 metric tons, leaving them
near three-decade lows at 26,550 metric tons.
London-based traders commented
that this prompted short covering there,
since there had been market rumors
that a few-thousand-ton build might
have occurred instead.
The inventory data, along with decent U.S. data,
provided underlying
fundamental support for copper, contacts
said throughout the day.
"Housing starts looked good and the durable-goods
order number was good,"
said Boustead.
"Apparently, growth prospects in the U.S.
have improved,
compared to what they were a couple
of months ago.
That's supportive, and the data out of China
certainly hasn't been bad to date."
Durable-goods orders climbed 1.4% during June,
the government reported first
thing Wednesday morning.
The consensus forecast had been for a 0.5% decline.
"It certainly suggests underlying demand for
the manufacturing sector is
still pretty strong," says Dan Vaught,
analyst with A.G. Edwards.
Later in the morning, the government said
new single-family homes hit a
record high in June as low mortgage rates
continued to attract buyers.
They rose 4.0% to a seasonally adjusted,
annualized rate of 1.374 million, when the
consensus forecast had been for around 1.3 million.
Vaught put support for September copper
around $1.60 - copper has held just
above here each day so far this week -
then the area from $1.58 down to $1.56.
Initial resistance was put around $1.64.
The most recent Comex warehouse data,
released late Tuesday afternoon, were
down 202 short tons at 11,970.
Settlements (ranges include overnight
and day sessions):
Sept (HGU05) $1.6270; up 2.10c;
Range $1.6010-$1.6350
Dec (HGZ05) $1.5555; up 2.15c;
Range $1.5330-$1.5600
Dow Jones Newswires
07-27-05 1350ET |
